Experts: Expand use of tax credits to jump-start Connecticut’s growth

Job creation a major issue for state

Published
10:26 pm EST, Monday, December 23, 2013

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Experts: Expand use of tax credits to jump-start Connecticut’s growth

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STORRS >> Economists with the Connecticut Center for Economic Analysis say if more than 64,000 people hadn’t left the state’s work force since mid-2010, the state’s unemployment rate would be 10.7 percent rather than its current level of 7.6 percent.

To jump-start the state’s economy in the short term, the University of Connecticut-based think tank is urging political leaders to expand the ways that existing tax credits can be used.

“We’ve had a miserable record of job creation over the past 20 years and it is only recently that we are starting to turn things around,” Fred Carstensen, the center’s director, said Monday. “It’s only recently that we’ve started to turn things around.”

Allowing companies in the private sector to use a “trove of accumulated tax credits to fund private sector capital projects ... has the potential to create tens of thousands of new jobs over the next two to four years,” Carstensen said, citing a 10-page report the center released over the weekend.

Allowing companies to use the tax credits they have accumulated over the years to reduce the cost of capital projects such as expanding buildings and purchasing new equipment would buy Connecticut time to let other longer term measures, like efforts to expand the state’s bioscience sector, to take hold.

Carstensen said he doesn’t believe other economic factors would cause companies to balk at the opportunity to use the tax credits and expand their businesses at the same time.

“It’s largely a misconception that companies don’t want to do business here because its too expensive,” he said. “Connecticut is 48th among states in terms of tax burden.”

The report also urges the administration of Gov. Dannel P. Malloy to accelerate the pace of a number of public sector capital projects whose funding has already been approved.

Funding for those projects is now in excess of $6.5 billion, Carstensen said.

Speaking at a training program for unionized bricklayers Friday, Malloy said Carstensen’s assessment of accelerating the process of moving capital projects through the pipeline doesn’t take into account real-life realities.

“These projects take time to bid,” Malloy said. “It’s not unusual for projects to take a year or more to bid and I inherited a backlog when I came into office.”